Those looking to purchase a home with an FHA mortgage loan in 2017 will be pleased to learn that higher loan guaranty limits apply in the new year. The FHA national loan limit ceiling increased in 2017 to $636,150.

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FHA Loan Limit Are Higher in 2017

January 25, 2017 - Those looking to purchase a home with an FHA mortgage loan in 2017 will be pleased to learn that higher loan guaranty limits apply in the new year. The FHA national loan limit ceiling increased in 2017 to $636,150. The floor for FHA mortgages also increases in 2017 to $275,665, which is up from the previous year’s $271,050.

According to a press release on the FHA/HUD official site, “The Federal Housing Administration...announced the agency's new schedule of FHA loan limits, and due to an increase in housing prices, most areas in the country will see a slight increase in loan limits in 2017. These loan limits are effective for case numbers assigned on or after January 1, 2017, and will remain in effect through the end of the year.”

Recent changes in housing prices, plus the new changes to FHA's floor and ceiling limits will result in the maximum loan limits for forward mortgages increasing in nearly 3,000 counties in the new year. According to the press release, there is no decrease in FHA loan guaranty limits elsewhere. “There were no areas with a decrease in the maximum loan limits for forward mortgages though they remain unchanged in 286 counties.”

The FHA minimum national loan limit floor is set, according to FHA.gov, at 65 percent of the “national conforming loan limit” of $424,100. The floor applies, according to FHA.gov, “to those areas where 115 percent of the median home price is less than 65 percent of the national conforming loan limit.”

Anywhere the FHA loan limit exceeds the "floor" is considered a high cost area for FHA mortgage loans. The maximum FHA loan limit "ceiling" for high-cost areas is “150 percent of the national conforming limit:” according to the official site.

And what about FHA reverse mortgages? According to the press release, “the maximum claim amount for FHA-insured Home Equity Conversion Mortgages (HECMs), or reverse mortgages, will increase to $636,150. This amount is 150 percent of the national conforming limit of $424,100.”
Speak to a loan officer if you aren’t sure how FHA loan guaranty limits for 2017 affect your transaction. The information listed here is for FHA loans with case numbers assigned on or after 1 January 2017.

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